Better Freight Rates!

Shippers near and far want to save on freight costs. Many, however, are stuck doing the same thing they’ve always done, and continue overlooking opportunities to improve customer service, increase speed, and cut costs. Regardless if you’re trying to get more control of your supply chain, reduce shipping costs, or gain more supply chain visibility, this post can lead you in the right direction. All the while, too many people are too focused on the BETTER or CHEAPER freight rate.

What you really should be focusing on is: What is the SMARTER freight rate?

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Improve Packaging

Proper freight packaging is one of, if not the most, important component in the shipping process. Shipments that are packaged insufficiently suffer from insurance claims due to loss and damage, and can be subject to numerous accessorials. Further more, reassessing the packaging of your freight into a more condensed unit can increase the density and thus lower the class, directly impacting your bottom line. While splurging on more reliable packaging may increase your upfront freight costs, in the long run it’s proven to pay off.

Understand All Modes

To get the most out of your supply chain, shippers must truly understand each mode available to identify specific lanes or shipments that qualify for lane conversion. For example, converting lanes totaling more than 500 miles from truckload to intermodal can save up to 50% of total costs with little increase to transit time and in decrease in service. If you are interested in intermodal lane conversion, download our Intermodal Reference Guide, or contact a member of our intermodal department!

At times, it is more cost effective and can reduce risk to consolidate LTL shipments into a truckload, or wait a day to ship a larger quantity of pallets in one LTL shipment. On the other hand, it is sometimes more effective to break apart a truckload into LTL shipments, as this can increase your LTL buying power and prompt carriers to give you better discounts. However, to effectively make these decisions, logistics managers must fully understand the benefits and risks of each mode.

Perform a Transportation Audit

Once you understand all possible modes and the benefits of each, it is time to perform a Transportation Audit. If the idea of a “Transportation Audit” seems daunting to you, you are not utilizing transportation technology effectively. Logistics companies, and companies who utilize the expertise of these 3PLs, perform transportation audits daily, using standardized algorithms and reports to automatically generate this information. Those, however, who are not reaping the benefits of these services, are the ones who could benefit the most from this sort of audit, as tedious as it may be. Compiling shipment data, from all carriers, locations, vendors, customers, etc. can reveal discrepancies in quoted vs invoiced amounts; inaccurate accessorials; inaccurate invoices; missed opportunities for consolidation; overlooked opportunities for route optimization; gradually increasing freight costs overtime; and many more. When these areas are identified, procedures can be put into place to prevent these errors from re-occurrence. Luckily, 3PLs are masters of these audits, and reduce the time and stress of this sort of analysis.

Process Improvement

Process improvement is an area all companies should continually be improving upon. Using the metrics provided by your TMS, you have the visibility to see problem areas within your supply chain, and can prioritize solutions based on those areas in need of immediate attention. Some examples of process improvement include: implementing EDI/API integrations, increase visibility of important information to all stakeholders (through TMS), knock down silos that separate departments and discourage communication, to name a few.

Increase Your Buying Power

There are multiple ways to increase your company’s freight-related buying power. What companies don’t realize, is that uncovering buying power within their current processes is extremely simple. One way, is to take control of your inbound freight. When shippers change their shipping terms from “Prepaid & Add” (Vendor pays for the freight, and then charges their customer back, sometimes with an additional fee) to “Collect” (carrier bills consignee directly) they are able to negotiate better discounts with carriers and avoid additional fees charged by their shippers. Another way to increase buying power is to convert full truckloads into LTL shipments, however, this is not always more cost effective in the long run, so all options should be weighed.

Additionally, if your company has multiple locations, all locations should negotiate freight rates with carriers (either directly, or through a 3PL) as one larger entity. If you are like many shippers, you are shipping from a single location, one way to increase your buying power is to join a cooperative with like companies and negotiate freight rates as a whole. Lastly, consulting a 3PL is a great way to reduce freight costs. By shipping through a 3PL shippers have access to their larger buying power, technology, and expertise.

3PLs play a major role in inbound freight management by integrating transportation technology with customers ERP systems to assist companies with PO Management. When a 3PL comes into the picture, team members are able to actively manage orders and ensure they are shipped on-tim, in-full, and in the most cost effective manner. Combining PO data with shipment data provides invaluable metrics and enable shippers to make effective decisions to reduce risk and save money.

Utilize a Transportation Management System

Implementing a Transportation Management System (TMS) is the number-one most effective way to uncover savings in your shipping process. These systems integrate with client ERP or order management systems, to pull invaluable data that provide advanced business analytics and metrics to inform decisions.

When Transportation Management Systems are able to pull PO data, time spent and errors made from manual entry are completely avoided as BOLs and other necessary shipping documents are automatically generated. In addition, Transportation Management Systems are designed to automatically schedule pickups with the carrier, or alert your 3PL that they need to, which adds to the time savings.

In addition, many companies have a hard time accurately quoting their freight when creating bids or projecting costs, which can lead to higher-than-expected freight invoices and decreased margins. By y implementing a TMS, all members of your team have a portal to quickly log on and get an instant freight quote.

Enlist Assistance of 3PL

While we may be biased, we firmly believe that partnering with a 3PL is the number one way to uncover savings in your shipping processes. 3PLs provide supply chain technology that saves time; decreases risk; streamlines manual processes; provides visibility to all stakeholders; and immediately alerts stakeholders to areas of concern. Furthermore, 3PLs bring their huge buying power to the table. This buying power comes with experience handling various kinds of freight from many different industries, so you can rest assured, your freight will be safe. In addition, 3PLs can help manage your company’s inbound freight and ensure JIT philosophies are in tact. By performing a transportation audit, logistics companies can suggest possible lanes that are eligible for conversion to a different mode or consolidation, and collaborate with the client to improve packaging.

Managed Transportation Services?

Many shippers think they must select either a transportation management system or a managed transportation services provider when in fact, they get the most bang for their buck when they utilize both from the same company. When the shipper takes advantage of both a TMS and managed transportation services, they are in command. The TMS gives them visibility into their supply chain, and the transportation services provider is responsible for accounting, claims, carrier performance, and continuous improvement. You have the information and the ability to focus on what you do best, while the service provider focuses on what they do best. This strategy has proven to result in the most opitmal ROI and increased customer service levels.

Strengthening vendor compliance encourages vendors to increase their customer service, which is directly passed on to you, the client, and your customers. Implementing lean or JIT philosophies is a priority for most shippers. These philosophies are often not performing at their fullest capacity as many companies must keep excess inventory to reduce risk.

On-Time Deliveries

Late Deliveries

Damages

Lost Product

Redirects/Returns

Ship Timliness

Ship Accuracy

Units Defective/Rejected

Order Management

Most companies understand the significance of order management, however, they don’t always understand the numerous ways in which 3PLs and their technology can improve these processes within the supply chain. McClain’s TMS is able to integrate with all ERP systems so when a customer creates an order, a carbon copy of that order is sent into the TMS. At this time, all line item information is now visible and ready for analysis with shipment data.

Inbound Collect

PO Management

As your 3PL provider, our goal is to use this stored information to build the largest, most cost effective shipment by identifying potential opportunities to combine your POs to reduce the number of shipments, subsequently decreasing unit cost. Throughout the life cycle of the order, McClain is proactively monitoring the shipment, making sure it is both ready to ship on time, and once picked up, delivers on time.

Arming McClain with this data alleviates the client from the guessing game and pressure to follow up. When these procedures and integrations are in place, McClain can ensure down to each individual line item, that the order is complete and shipped in the most cost and time efficient manner. If an order is not going to make delivery, or is short shipped, we will work with both shipper and vendor to appease the issue. As the shipper reports progress to the McClain, these updates will be manifested with all other relevant shipment and order information. At this time, clients can log into their portal and see instant updates on their shipment.

Outbound Prepaid

SO/CO Management

Through an integration to your ERP system, we are able to receive an electronic transmission of your SO or CO data. Not only does this store all of your SO/CO information in a centralized location in conjunction with all shipment data, but it reduces time and errors made from manual entry of shipment data. When these processes are in place, your shipping manager is able to search the SO/CO when creating a shipment, decreasing the time spent manually creating the shipment. This integration provides McClain and our clients with visibility of all pending orders.

Freight Pay and Audit

Rather than receiving individual invoices from multiple carriers, McClain takes responsibility for all invoices. When an invoice is received, the billed amount is electronically compared to the quoted amount in our system. If these amounts are the same, the invoice gets approved and the client is billed based on their individual invoicing agreements with McClain. If the billed amount varies from the quoted amount due to a possible assessorial, reclassification, or reweigh, a case is created and the CSR is responsible for resolving these discrepancies prior to the client receiving the invoice. All accessorials, re-weighs, and reclasses, are meticulously tracked for client accounting purposes and yearly negotiations with carriers.

Business Intelligence

Salesforce’s native features provide exceptional analytic building tools. When shipment and order information is centralized, not only is time saved, but errors caused by manual entry are avoided. This allows clients to accurately manage and analyze transportation costs and execution performance data. These features provide greater flexibility in modifying standard reports or creating entirely new ones, with the ability to export to excel or email directly from the system on a scheduled or on demand basis.

As the saying goes, knowledge is power. This “big data” gives companies power, and control. What the above metrics, as well as many more, give executives and logistics managers is the knowledge, control, and ability to streamline processes and save both time and money. This information can provide personnel at all levels an instant snapshot of their KPIs, while highlighting those that need immediate attention.

Compiling PO and freight information into a centralized location allows current and historical data to be analyzed. From this analysis, exceptions are identified and procedures are implemented to mitigate potential risks from recurrence. Using exception management dashboards and alerts to identify these potential risks focuses time on those shipments in jeopardy or in need of immediate attention.

Business Intelligence Metrics

Total Freight Spend

Average Cost Per Mile, Pound, Unit, Etc.

Average Carrier, Vendor, Client, Shipment Cost

Outbound Freight as a Percent of Net Sales

Inbound Freight as a Percentage of Purchases

Accuracy of Transit Times

Vendor and Carrier Compliance

Claims as a Percent of Freight Cost

Employee Key Performance Data

Through PO/ERP Integration we were able to reduce short ships from our vendors and build bigger shipments to optimize lanes. We minimized inbound shipments and can now hold our vendors accountable. – Safety Products Manufacturer

SUPPLY CHAIN SERVICES

At McClain, we have a hands on and conversational approach to our supply chain consulting services. Each client is different, and as such, their supply chain needs are different. We will perform an analysis of your past freight invoices to uncover areas for savings and initiate route optimization and load planning. McClain & Associates utilizes our industry expertise and years of experiences, as well as our knowledge of our clients industries to remedy current supply chain challenges, and prepare for and mitigate future issues. We understand that both uncovering cost efficiencies and maintaining positive customer service are priorities. At McClain, are committed to properly addressing both concerns.

Whether your company is in need of a complete supply chain overhaul, or you merely have a few questions you’d like answered by industry professionals, we can help. We collaborate with your employees at all levels to provide a fresh set of eyes and implement procedures and technology that improve customer satisfaction, decrease costs, and optimize your overall supply chain.

Family Owned

Mike McClain’s original footprint in the transportation industry can be found in owning and managing multiple warehousing facilities throughout St. Louis beginning in 1995 before transitioning to become St. Louis’ premiere logistics company. We live and breath for our company, our customers, and our employees, which is why the majority of our clients and employees have never left (and oftentimes even come to our family functions!).

Being family owned, trust, authenticity, and next-gen ingenuity are ingrained within our culture.

We are

Financially Stable

Amid dynamic economic times, McClain has not only survived, but thrive. Being both non-asset based and technology driven enables us to excel in an ever-changing business environment. As a 3PL, McClain has not only grown at consistent double-digit pace annually since our conception in 1995 but has remained a viable competitor in a volatile marketplace. Our financial sustainability and many years of combined employee experience has allowed McClain not only to gain the respect of the industry, but has also given us the opportunity to partner with best in class carriers to foster lasting relationships that in turn, benefit our client’s bottom line.

We are

Contract Free

Many logistics companies enforce strict contracts upon their clients, obligating them to utilize only their services, regardless of cost increases or unreliable service for the duration of the contract. This forces commitment from you, the client, but it doesn’t elicit commitment from the logistics company. At McClain we are committed to earning your business each day, we see no need to force contracts upon our clients. We perpetuate top-notch service, and our clients don’t want to leave. At McClain, your goals are our commitments.

We are

Logistics Experts

At McClain, our employees are what set us apart from the rest. With experience in various industries and a passion for logistics, our team is constantly prepared and on the clock 24-7. Your dedicated logistics expert will get to know you, your customers, and your vendors personally, and will build a relationship that fosters communication, efficiency, and trust. Each time you make contact with McClain, you will know the person on the other end of the line.

Each department (LTL, TL, Intermodal) within McClain is managed by a logistics industry expert, knowledgeable not only in their respective department but in how each department works cohesively together to comprise their customer’s transportation footprint. With this being said, members of all departments are continuously collaborating across modes to uncover cost and time-saving opportunities for their customers.

Transportation Visibility

If you don’t have visibility into your supply chain you could be (honestly, you are) losing money and wasting time. Article after article talks about the benefits of transportation visibility:

Increases customer service & gets info to customers quicker

Streamlines processes

Uncovers opportunities for route optimization

Knocks down silos between stakeholders

Mitigates risk

Gives better control over the cost of freight/saves money

What many of these articles don’t discuss, is how this is applied to and benefits the roles of multiple stakeholders within your organization. To generalize, and name just a few, C-level, logistics, accounting, purchasing, sales/project managers, and customer service all benefit from increased transportation visibility.

C-Level

C-level execs benefit from transportation visibility. Visibility and big data gives execs the information necessary to evaluate and refine business performance, monitor internal compliance thus giving them more control over their supply chain.

With visibility, you can analyze historical data. Uncover the precursors to past hazards and implement exception management protocol to alert proper stakeholders when these situations have the possibility of arising again. This mitigates risk and reduces the need for excess inventory.

93%

of shippers say success is dependent upon ability to make data driven decisions

Logistics Personnel

Visibility gives transportation and supply chain managers the ability to instantly compare rates and transit times as well as schedule and track shipments in a centralized location. Often times, the transportation manager is the sole repository for tracking data, however, they aren’t the only stakeholders who need access to this information. Giving other stakeholders visibility, allows them to track their own freight without having to get this information through the transportation manager.

71%

Accounting

Transportation visibility not only saves accounting personnel time, but it saves the company as a whole money. Visibility simplifies carrier invoice audit to a central location accessible at anytime. This freight bills are automatically audited eliminating the need for additional employees to manually audit these bills.

What about if your buyers are sales reps are estimating costs? Wouldn’t it be able to get an accurate quote and/or track these costs to ensure accurate P&L? (more info on this below)

This streamlines processes within both the receivables and payables departments resulting in tremendous savings.

Ability to quote instantly quote freight costs and take this into consideration when evaluating vendors

Visibility of all inbound freight leads to route optimization

58%

of businesses find it difficult to track and report on vendor service levels

Sales & Project Managers

Sales reps and project managers are constantly working freight costs into their estimates and proposals, but how do you/they know these costs are accurate? Furthermore, how do you know there were no changes in freight costs (accessorials, re-classes, re-weighs) after the estimate was given? Oftentimes, without visibility companies have no way to track these costs and their P&Ls end up inaccurate as a result.

Oftentimes, customers contact their sales reps for tracking info, which is not readily available to them (as most of this information resides in the brain of the transportation manager). If sales reps have access to this information through a portal, automatic email notificiations, and website tracking, they can relay this information to customers without skipping a beat.

70%

of buyers experiences are based on how the customer feels they are being treated

Customer Service

If your customers aren’t contacting your sales reps for tracking information, they are more than likely contacting your customer service. Again, tracking information is often only available through the transportation manager so your CSR will have to spend time contacting them (who might have to contact the carriers) to get this information back to the customer. It’s a huge waste of time and can be avoided through transportation visibility.

86%

Your Way

Most companies understand the significance of order management, however, they don’t always understand the numerous ways in which 3PLs and their technology can improve these processes. McClain’s TMS is able to integrate with all ERP systems so when a customer creates an order, a carbon copy of that order is sent into the TMS. At this time, all line item information is now visible and ready for analysis with shipment data.

Real-Time Tracking Updates

Real-time tracking updates can be sent via email to customers or stakeholders within your organization. These notifications are customizable with your logo, color scheme and any additional notes or information pertinent to your freight.

McClain Website Tracking

Using McClain’s tracking number, all stakeholders can track shipments through McClain’s website without a portal. Additionally, this tracking link is sent in notification emails and can be found in customer portals to be easily sent to employees or customers.

Inbound Freight Tracking

Customers with a substantial amount of freight coming into their facility want instant access to their product at all times through customizable portals. In some instances, it may be beneficial to integrate McClain’s TMS with your ERP system or dictate on your PO that inbound freight be routed through McClain.

Bypass Transportation Manager

In many companies, many people are intersted in the location of inbound freight, however, the information is often only quickly accessible by the transportation manager. Employees can call or email McClain to get important tracking info freeing up precious time for your transportation manager.

Auto Tracking Shipment Reports

With or without a portal, customers can receive reports (you determine how often and when) with criteria they specify with tracking information. This can include links to real-time website tracking and can be forwarded on to other stakeholders.

Customizable Portals

Your customers call various people within your company to track your freight, and probably expect them all to know the answer, quickly at that! Oftentimes however, the transportation manager is the only one with access to this information. By giving your employees a portal with just the right amount of information, they can search by PO, SO, Pro, McClain Tracking Number, etc. to quickly find the shipment and relay info to customers in a timely manner.